Chapter 2.3, Problem 1R

Solution

The significance of given terms is to be explained.

Economic efficiency: The major goal of economic efficiency is wisely use of limited resources available. There is scarcity of resources, if the factors of production are wasted then the good and services produced will be fewer in quantity. So, it is said to produce output with lower cost.

Economic equity:The major goal of economic equity is to provide fairness to all persons through economic policy. The policy should pass laws like equal pay for equal workers, no partiality in hiring of candidates and providing helping hands to the disabled persons.

Standard of living:The major goal of economic stability is to lower the ups and downs in the standard of living. The standard of living is defined as how well and effectively an individual can satisfy his basic needs and wants. This is calculated as the average value of goods and services used by the average number of individuals at a specific period of time.

Economic growth:Economic growth is defined as the rise in the valuation of goods and services produced in long run. Production of goods and services should be expanded with the rise in population of an economy so as to satisfy an individual with their needs. Economic growth is the major goal of all nations so that it can meet other goals of the nation.